Valhi (VHI) Stock Forecast & Price Target

Valhi Inc is projected to experience significant financial growth, with EBITDA anticipated to rise at a compound annual growth rate (CAGR) of 37%, increasing from $25 million for fiscal year 2025 to $47 million by fiscal year 2027, alongside an expansion in EBITDA margin from 24.2% to 30.1%. Furthermore, the company's earnings per share (EPS) are expected to increase by 23% over the next 12 months, outperforming peers in the Canadian software consolidation sector, which are forecasted to witness EPS growth rates of 12% and 13%. This strong performance indicates robust operational leverage and overall favorable market conditions driving Valhi's growth trajectory.

Valhi Inc. faces significant financial challenges, as demonstrated by a 57% decline in revenue from the Attend Anywhere platform over the last two years, resulting in only £5.0 million for FY25 due to pricing pressures and competition from Microsoft Teams. Additionally, the NHS's productivity remains substantially below pre-pandemic levels, estimated at 11% under the 2019/2020 benchmark, which further impacts demand for services reliant on NHS funding. While there is an expectation for EBITDA margins to recover from 21.5% in Q3/FY25e back to 25% within the year, the projected decline from 26.4% in Q2/FY25 raises concerns about short-term profitability and operational efficiency.